As we’ve written here numerous times, the cost of a new condominium in Tokyo has risen beyond the reach of most middle class households and even quite a few upper middle class ones. According to a recent article in the weekly magazine Aera, the average price of a new condo in the 23 wards now stands at ¥136.13 million, meaning that the average price has lingered above ¥100 million for three years in a row. 

Still, middle class families are trying and usually require a break to get a deal they can afford. Aera interviewed a man in his late 40s named Kazuya (not real) who moved into a condo in the Harumi Flag complex on the waterfront last September after purchasing the unit in 2023. If you’ve read this blog for the past five years you’ll know that Harumi Flag was the athletes village for the most recent Tokyo Olympics, and that units were initially sold at prices considered below market value. Consequently, the demand was high and a strict lottery was used, with some of the more popular units attracting as many as 150 applications. However, because of the one-year delay of the Olympics due to the pandemic and other factors, the people who managed to get selected to purchase units had to wait a few years before moving in. Kazuya, his wife, and two children previously lived in a 67-square meter “maisonette-style” condo in Ebisu. The Harumi Flag unit is 82 square meters and reportedly has a spectacular view. The purchase price was ¥94.9 million, for which they took out a 35-year variable interest loan and pay ¥250,000 a month, not including management and repair fees. Since the family’s total income varies between ¥10 million and ¥15 million a year, they can afford it…for now. 

However, according to Aera’s research, a comparable unit in Harumi Flag is now going for ¥190 million, an increase in value of ¥100 million since the Kazuyas purchased theirs. As Kazuya told Aera, the increase in value “has no meaning for us, since we plan to live here permanently,” though the statement sounds somewhat disingenuous. When you live in a property that has doubled in value in less than three years, it has to have some meaning. 

The last time the average price of a new condo in Tokyo’s 23 wards was less than ¥100 million was 2022, when it was ¥82 million. By the following year it had risen to ¥114 million, a 39 percent increase. In the 3 years since 2022 the rise has been 65 percent. 

According to one real estate research center Aera talked to, the conventional wisdom with regard to new condominiums was that you lived in it for 30 years and then sold it at a considerable loss compared to what you originally paid for it. Most consumers in Japan understand this process and accept it, though, of course, they always hope to get a good price when they do sell it. So the fact that a unit in Tokyo would increase in value by ¥100 million in three years is almost mind-boggling and the result of various factors, including the fact that the public’s way of thinking toward Tokyo properties changed drastically after COVID; that the value of the yen has declined greatly in the meantime, thus spurring foreign investment in real estate; consumers’ fear of rising inflation, thus making them think they have to buy property now; and the idea that real estate is an effective hedge against risk. 

Aera says that an online group of Harumi property owners have lately discussed rumors that there are many corporations that own multiple units in the complex. These owners are obviously in the building for investment purposes and are the main reason why prices have risen so fast. Kazuya says he heard that even before anyone moved into the complex some owners were already selling units for a profit. 

Aera focuses on Harumi Flag as being representative of the condo market in the 23 wards. In fact, Harumi Flag seems to be the last condo development project in Tokyo where units could be bought by middle class consumers since the metropolitan government was administering the sale and wanted to keep things affordable. The consumers are now searching on the outskirts of the capital and in the suburbs for affordable units. The days of renting in Tokyo and saving up for a condo have long passed, since rents are too high as well. Most of the middle class buyers of suburban condos fit into two broad profiles: double-income households where much of the work is done remotely so that commuting “isn’t a daily necessity”; and seniors who used to own houses that were far from the nearest train station and who now want to live in more convenient surroundings, meaning a neighborhood close to a train station that has all the amenities within walking distance. In both cases, money is usually not a problem, so the choicest condos at large train station hubs that connect to lines going into Tokyo are now increasing in price at a rapid pace, while everywhere else prices are stagnant or dropping. As one developer told Aera, if a new condo is located more than 10 minutes by foot from a station in the suburbs, it can take a long time to find a buyer. 

But even in cases where a new condo is located in an area that is less popular, costs for construction are just as high as they are in Tokyo, and will be for a long time, so why should developers build condos anywhere but Tokyo or near popular railway hubs if they may not be able to sell them? As it stands, there are many used condos that are in excellent condition because they are not that old, but they have become difficult to sell because of their location. One couple Aera talked to say they are willing to buy a used condo in an area of Tokyo outside the 23 wards, but not if it’s more than 5 years old and more than 5 minutes from the nearest station, criteria that are very limiting.

Another real estate research company told Aera that until the end of 2020, 56 percent of the new condos put on the market in the Tokyo suburbs were priced between ¥40 million and ¥80 million, the range that most buyers were willing to pay, but now only 44 percent of new condos in the suburbs fall into that range. And the number of new condos that have gone on sale per year has halved in that time, thus reflecting the strategy of developers: Only build condos in areas where sales are assured. Of course, developers would prefer just building in Tokyo since sales are guaranteed there, regardless of the price, but it’s becoming more and more difficult for developers to find empty land for sale, and so to continue doing business they’re building more in the suburbs. In 2023, residential developers bought about 120 lots in Tokyo for condos, while in 2025 the number dropped to 50.